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Samsung reports record profit ahead of Galaxy S4

Reuters/ AFR | April 26, 2013
Samsung has reported its sixth straight quarter of profit growth ahead of the debut of its latest Galaxy smartphone, the South Korean IT giant's biggest assault on rival Apple yet.

Samsung reports record profit ahead of Galaxy S4

At the Sydney Opera House, where Samsung launched the Galaxy S4 on Tuesday night, where it will remain on display for two weeks.

 

Samsung has said its first-quarter net income has jumped 42 per cent over a year earlier to a record high thanks to robust smartphone sales even during a typically slow season for the electronics market.

The world's largest smartphone maker said on Friday its net income reached 7.2 trillion won ($A6.34 billion) in the first three months of 2013, compared with 5 trillion won a year earlier.

The figure marks a 2 per cent increase from the previous quarter and a surprise. Analysts expected Samsung to report lower profit than the fourth quarter because demand typically slows.

Samsung has said demand for the Galaxy S III smartphones and the Galaxy Note devices shored up profit.

Sales rose 17 per cent to 52.9 trillion won. Operating profit was up 54 per cent to 8.8 trillion won

By launching the Galaxy S4 this Saturday, Samsung is taking aim at Apple's home market at a time when the iPhone maker appears to have hit a snag.

According to Bloomberg, the device is one of three handsets to appear this year, part of Samsung's plan to win back the lead in the US smartphone sales from Apple. IT was overtaken by Apple in the last quarter of 2012.

Earlier this week, Apple reported its first profit decline in more than a decade and indicated no major product releases until the US autumn.

Samsung is widely expected to resume posting record quarterly profits, after a hiatus in January-March, as the S4 is dispatched to 327 mobile carriers in 155 countries.

This week, Samsung has kicked off a massive advertising campaign for the S4 and set up mini stores in Sydney's Opera House and Best Buy locations in the US to promote it.

Initial orders have surprised on the upside, with the firm expecting a short-term supply crunch.

It said on Friday it is not having any component shortage issues related to flagship smartphone Galaxy S4, which goes on sale this weekend, as supply issues have snarled the US rollout with some major carriers.

"We have secured key components well in advance but temporarily experiencing supply problems due to stronger than expected initial supply request. We expect the bottleneck to be resolved soon," Kim Hyun-joon, vice president of Samsung's mobile business, told analysts.

Early success of the S4 is crucial in determining the extent of the expected second-quarter record earnings for a company that gets more than 70 per cent of its overall profit from mobile devices.

 

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